The Most Effective Weapon That Biden Isn’t Using Against Putin

Posted on Wednesday, March 9, 2022
by AMAC Newsline

AMAC Exclusive – By Ben Solis

On Tuesday, after much hesitation, the Biden administration finally banned imports of Russian oil, natural gas, and coal. But even though this latest development is a positive first step, the White House still hasn’t fully exercised all its options when it comes to hitting Putin where it actually hurts – Russia’s energy infrastructure.

The last decade of the Cold War provides a useful historical parallel for how the West might go beyond bans on imports of Russian energy to break the backbone of the Russian economy and bring Putin to heel. Then, as is the case now, many European countries relied on energy exports from Russia. However, U.S. President Ronald Reagan boldly took on the Kremlin by targeting energy production in the U.S.S.R. while also ramping up U.S. output.

President Reagan’s policies focused on targeting the new trans-Siberian pipeline that was to deliver natural gas from the Urengoi-6 gas fields in Siberia across Kazakhstan, Russia, and Eastern Europe, into the hard currency markets of the West. Reagan’s Special Task Force correctly identified the strategic value of the project, which one Soviet magazine described as “the Soviet Union’s landmark in world economic events.”

The goal of President Reagan’s policy was to cut the Soviet Union off from hard currency and deny it new technology – both key factors that would eventually lead to the fall of the Soviet Union itself.

The 253 compresser stations connected by 3,600 miles of pipeline made of 4 to 5 million tons of steel pipe was a trap set by the Soviet Union for Western Europe, making it dangerously reliant on Soviet supplies. If completed, the Soviets would suddenly have gained a stranglehold over the Western economy. Gas de France analysts estimated in 1983 that by 1990, Russian deliveries would rise to 40 percent of Western Europe’s total natural gas requirement.

Soviet foreign exchange earnings from the natural gas sales were projected to range from $10 to $15 billion annually. These revenues, within a few short years, could give the Soviets substantial financial leeway to completely reorganize the $80 billion worth of debt owed by East bloc countries to Western banks, thereby restoring the Soviet Union’s economy.

Leonid Brezhnev, in talks with top Soviet-Polish Communist Wojciech Jaruzelski, stated the pipeline would be “the largest project in recorded history,” and that the Communist world would be able to reshape Europe and the world.

The U.S. soon heavily targeted the pipeline with sanctions. In addition, intelligence acquired from the French was used by an American agent to sabotage the project, in what became one of the more incredible untold stories of the Cold War. 

By stopping the pipeline, the Reagan administration destroyed Soviet dreams of acquiring supremacy on the European energy market and restoration of the wrecked Soviet economy, opening a path to freedom for nations behind the Iron Curtain.

Today, the West has suddenly found that, unlike in the last century, it has fallen into Putin’s energy trap. Fearful and apprehensive, Europeans deliberately exempted Russia’s energy exports from sanctions. No one has been more complicit in this sellout than the Germans, who set out to build a direct undersea natural gas link with Russia through Nord Stream 2.

According to the Organization for Economic Cooperation and Development, in November 2019 exports to Europe constituted more than 40 percent of the total Russian crude and refined petroleum trade. China, with its 19.8 percent share, cannot replace it. Crude and refined petroleum trade make up 43 percent of the Russian economy.

However, there may still be a way out for Europe and the United States – and this time, it won’t involve a clandestine operation. Russia is bound to economically inefficient long-term gas and oil contracts with China. Those contracts will cause Russia to incur enormous losses, not only because the Chinese negotiated a set price on the day of signing, but also because they did not agree to buy resources transferred through Mongolia.

Now Russian firms must build 12 modern compressor stations and connect existent pipelines through Siberia and the Arctic into China.

The only serious source of cash for these investments and the modernization of old Soviet infrastructure is Europe, giving the West a glimmer of hope for leverage over Putin. Moreover, without trade with Europe, Russia would have difficulty extracting gas and oil from the Arctic.

The only way for the West to leverage these gains, however, is to cut their reliance on Russian energy – a task that will not be easy or painless. But the return of the United States energy policy of the Trump administration would lower the U.S. crude oil price, deprive Putin of hard currency, de-invest his energy sector infrastructure, and replace Russian gas and oil supplies in Europe with American exports.

Like during the Reagan era, when the Urengoi-6 pipeline changed the course of the Cold War, today projects like the Keystone Pipeline could radically redirect the current war in Ukraine and deter future Russian aggression. Further, a combined Western effort to hamper Putin’s ability to replace his aging energy infrastructure would be an even more effective pressure campaign than simply banning Russian imports. As it stands, the West will likely begin importing Russian oil again as soon as the media frenzy over Ukraine dies down.

Every day that the Biden administration fails to unleash the potent economic weapon of the American energy sector, which will in turn free the West to target the Russian energy economy, is another day that Putin maintains a stranglehold over Europe and undercuts the West’s response to Russia’s invasion of Ukraine. For the West to prevail against the resurgent threat of an expansionist Russia, the U.S. and its allies must be determined to hit Russia where it hurts – not just with sanctions but with a lasting commitment to end their reliance on Russian energy.

Ben Solis is the pen name of an international affairs journalist, historian, theologian, and researcher.